Treasury yields mixed on strong economic data

U.S. Treasury yields were mixed last week and spread sectors outperformed as fourth quarter U.S. GDP exceeded expectations. The market continues to price in a 50% chance of a U.S. Federal Reserve rate cut by March, and around five total cuts for this year.

Treasury yields mixed on strong economic data

Weekly fixed income update highlights

  • Total returns were positive across most major asset classes, including Treasuries, investment grade and high yield corporates, preferreds, senior loans and emerging markets.
  • Municipal bond yields were mixed. New issue supply was $8.3B and fund inflows were $211M. This week’s new issuance is estimated to be a light $4.5B.


  • The 10-year U.S. Treasury yield fell slightly last week, and we anticipate declines in overall rates in the months ahead.
  • Spread assets broadly outperformed Treasuries.
  • Increased seasonal supply should provide an attractive entry point for municipal bonds.

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